The investment giant run by Warren Buffett is holding a record £126billion in cash as he dumps blue-chip companies.
Berkshire Hathaway revealed it has sold off its remaining holding in carmaker General Motors, worth an estimated £683million, as well as stakes in Johnson & Johnson and Procter & Gamble, worth around £40million each.
It also shrunk its stake in retail behemoth Amazon by 5 per cent, trimmed its ownership of printer maker HP by 15 per cent and reduced its stock holdings in oil firm Chevron by 10 per cent.
This meant that Berkshire ended the three months to September with £256billion in equity holdings and £126billion in cash, according to the latest filings.
Berkshire – which Buffett has run since 1965 – is renowned for taking stakes in some of the biggest companies in the world.
Cashing in: Berkshire Hathaway – which investing legend Warren Buffett (pictured) has run since 1965 – has sold off its remaining stake in General Motors, worth an estimated £683m
But Neil Wilson, analyst at Markets.com, said Buffett could be ‘betting on a big cyclical downturn as rate hikes bite’.
Investors have become increasingly spooked by high interest rates on both sides of the Atlantic – making cash reserves more appealing than risky bets on the stock market.
Across 2023 so far, Berkshire has sold £19billion more stocks than it has bought.
And Buffett, 93, has been previously said: ‘Interest rates are to asset prices what gravity is to the apple.
When there are low interest rates, there is a very low gravitational pull on asset prices. The most important item over time in valuation is obviously interest rates.’
Other analysts have suggested that Buffett is building up his cash reserves in anticipation of bargains emerging.
Danni Hewson, an analyst at AJ Bell, said: ‘Buffett is nothing if not patient, he’s always been clear he’s playing the long game and this strategy suggests he’s waiting for opportunity to knock far louder than it currently is.’
But some of the sell-offs could have been more calculated. Speaking on a podcast, Berkshire’s vice chairman and Buffett’s business partner, Charlie Munger, 99, slammed General Motors.
‘In its heyday, General Motors was a great company – it just gradually went to hell one contract at a time,’ he said.
Berkshire first invested in the car giant in 2012.
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